FTC and 22 States Hit Amazon With $20 Billion Ad‑Price Allegation

Sun Sep 06 2026 03:22:57 GMT+0000 (Coordinated Universal Time)

US regulators claim Amazon secretly overcharged advertisers, boosting its advertising profits while squeezing consumer prices.

The Federal Trade Commission and a bipartisan group of 22 states filed a lawsuit accusing Amazon of manipulating second‑price auctions to overcharge advertisers by up to 80% of the time. The suit claims Amazon generated roughly $20 billion in excess revenue since 2019, a figure that could be passed on to customers. Amazon has denied wrongdoing, labeling the complaint "misguided" and said it misinterprets how ad auctions work. The lawsuit’s arrival sent Amazon’s shares lower by 2.5% that morning. If confirmed, the case could reshape how the streaming giant’s advertising platform charges sellers and marketers alike.

The U.S. Federal Trade Commission (FTC) and a bipartisan group of 22 states filed a lawsuit Monday accusing Amazon of secretly overcharging advertisers for Sponsored Products and Brands ads on its platform. The complaint says that since 2019, Amazon has manipulated its second‑price auctions—a system where winning bidders normally pay one cent more than the next highest bid—so that approximately 80% of the time Amazon actually charges bidders nearly their full winning bid. The alleged scheme is said to have netted Amazon around $20 billion in excess revenue, an amount that would ultimately be reflected in higher prices for shoppers on the company’s marketplace.¹

Amazon replied in a statement that it "strongly disagrees" with the allegations and called the suit "misguided". The company maintains that it does not override auction results but instead relies on data and performance metrics to inform ad pricing. It also said the FTC "fundamentally misunderstands how advertisers operate" as it claims. Amazon’s shares fell 2.5% on the day the lawsuit was announced, underscoring the market’s concern about the potential impact on the company’s advertising business.

The claim that Amazon’s manipulated auction pricing has harmed both advertisers and consumers echoes the firm’s past disputes with the FTC, most notably a 2025 settlement that forced the company to refund customers for unsolicited Prime memberships, which was worth $2.5 billion. If the lawsuit proceeds, it could pressure Amazon to overhaul its ad‑auction mechanism and could also pave the way for stricter regulatory scrutiny across the e‑commerce and advertising sectors.²

For more details on the FTC complaint and related regulatory actions, readers can visit FTC’s official filing.